Don't underestimate the fossil fuel industry as it relates to the Trump-Russia scandal.
I have a feeling that when all is said and done with the investigations into President Donald Trump, and associates and their dealings with Russia, it is going to come down to money and oil.
Trump has been more than cozy with Russia since his campaign started, and while he and his family deny they have any financial interests tied to Russia, previous comments and tidbits of information that have leaked out suggest otherwise.
Russia, for its part, is the second largest petroleum producer in the world, and it took a hit when the U.S. imposed sanctions after Russia annexed Crimea in 2014. Rex Tillerson, the man who Trump tapped as Secretary of State, worked for Exxon, and Exxon has a lot at stake because it has negotiated deals with Russia.
Some may discount Tillerson’s and Exxon’s role, especially since both have come out not only admitting climate change is a major issue, but supporting the U.S. role in the Paris climate agreement, the very agreement Trump pulled us out of this week.
But while it is true that Exxon, and many other major energy companies that relied on fossil fuels are turning more to renewable energy because they see that is where the world is going, these companies still have massive dollars and investments tied up in refineries, drilling operations and other equipment.
The turn away from fossil fuels and the impact on major oil companies is a mirror image of advances in communication that have hurt the newspaper industry.
Newspaper readership continues to struggle as more and more people get their news from other sources, mainly online. Ironically, even as newspaper readership declines, news readership has continued to grow. More people know more about world, national, state and local events now than perhaps any time in history, but they are doing so through online sources (including legacy newspaper companies).
Newspaper companies knew for decades that change was coming, and that as people moved to other ways to get their news – i.e. online – then the advertising dollars would logically follow them. At the same time, big newspaper companies had lots of money tied up in giant printing presses, buildings and other assets. So they had to walk a balancing act of moving forward with the innovations of the day while also making sure they were making the payments on their property and those gigantic printing presses.
Major oil companies have already undergone tremendous consolidation, but there was a lot of room for that in the beginning with newspapers. That consolidation, along with innovation, a drive to present the news and advances in technology continues to help news organizations make the transition to online. Oil companies are not as far along in their transition. They still hope to squeeze as much out of those expensive rigs and refineries as possible, even as they ramp up their efforts into solar, wind or other renewable energy sources.
If the U.S. rejects renewable energy sources or puts a priority on keeping alive the dying fossil fuel industries, that is going to keep these companies in business and more profitable for at least a few more years. And when you are a bean counter for a major industry with a lot of money tied up in fixed assets, then being able to utilize those fixed assets even a few more years is going to be attractive.
Russia likely has promised Trump something in return for lifting sanctions. Or perhaps the country is just playing him for a fool and he is falling for it hook, line and sinker. Ultimately, however, the oil industry is likely the biggest driving force. Remember the Iraq war under George W. Bush? Did the administration deliberately mislead the public as a way to get our hands on cheaper oil, as some have alleged? Or was Bush duped?
Either way, we are the ones who end up on the loser’s end of things. The world is turning to cleaner (and cheaper) energy sources. Even the big oil companies see that, and they have jumped on board. But they still would like to squeeze as much out of their billion-dollar investments in equipment as possible before they have to throw it all on the scrap heap.
Trump, either by design or as an unwitting accomplice, is happily helping them along.
Jim Lee is Editor for Gatehouse Media Delaware. Email him at email@example.com.